| "What is that", you say? OIC stands for Offer in | | | | Government. |
| Compromise, and if you find yourself in the unenviable | | | | An Offer in Compromise is an agreement that has to |
| position of owing the Internal Revenue Service for | | | | be reached between the taxpayer and the IRS. Since |
| back taxes that are still due and payable, then this | | | | it settles the tax liability for less than the full amount |
| may well be your best option. | | | | owed, without the right set of facts and circumstances |
| Now the next question is, are you good candidate for | | | | an offer will not be accepted if they think the debt can |
| an Offer in Compromise? | | | | be paid in full or through one of their installment |
| Whether you are an individual or a business, and you | | | | payment agreements. |
| do not have the wherewithal, i.e. income, assets, or the | | | | The Internal Revenue Service may accept an OIC |
| means to pay your debt to the IRS right now or in the | | | | based on the following three grounds: |
| not too distant future, you could be a bona fide | | | | 1. Doubt of Collectibility - reasonable doubt that the |
| candidate for an Offer in Compromise. What the | | | | taxpayer would ever be able to pay the full amount |
| program is designed to do is allow a taxpayer to offer | | | | owed. |
| an amount for settlement that is less than the | | | | 2. Doubt as to the Liability - there exists a reasonable |
| undisputed total tax liability. The Internal Revenue | | | | doubt that the tax that's been assessed is correct. |
| Service will approve an OIC when what is offered is | | | | 3. Effective tax Administration - simply put the tax is |
| the most they can expect to collect in a reasonable | | | | correct and there may even be some potential to |
| time period. | | | | collect the full amount owed, but extenuating |
| Each case is evaluated on the unique facts and | | | | circumstances exist that would allow the IRS to |
| circumstances surrounding it. Strong consideration is | | | | consider an OIC. To qualify the applicant would have |
| given to factors such as: | | | | to demonstrate that the collection of the full amount |
| 1. Ability to pay. | | | | would cause an undue hardship or would somehow be |
| 2. The equity a taxpayer has in their assets. | | | | unfair and inequitable. |
| 3. Present and any possible future income. | | | | There you have it. Now you know what the Internal |
| 4. Present and future expenses. | | | | Revenue Service takes into consideration to qualify for |
| 5. The likelihood of a change in the taxpayers | | | | an OIC. As you can see, it could be tricky and no place |
| circumstances for better or worse. | | | | to go it alone, but with the proper representation, it |
| 6. Whether the offer is in the best interests of the | | | | could be just what the doctor ordered. |